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Bold and different: Lessons from Tesla’s anti-franchise movement

On Behalf of | Jun 26, 2019 | Franchise Law |

It is no secret that Tesla Motors has made significant strides within the automotive industry. They capture the idealistic image of modern American liberalism. Elon Musk, Tesla’s CEO, is recognized for implementing boldly innovative strategies that defy against the traditional approach of other automotive competitors.

Tesla adapted a unique sales strategy that supports a direct relationship with the consumer. Conservatives worry that this type of business model poses a monopolistic threat to other competing retailers in the industry.

High drama in New Jersey

Tesla’s specific approach toward franchising and sales model as a direct manufacturer of their auto sales are limited even prohibited, in some states. The concept of ‘Anti-Tesla’ laws began to arise as legislative officials have put fourth efforts to protect dealers for the good of the consumer.


Back in 2014, New Jersey’s Motor Vehicle Commission a rule that temporarily banned the sale of Tesla products in NJ. It has since moved forward to limited sales.

This notion had brought a great amount of controversy to the issue for both parties. The argument is that the factory-store model adapted by Tesla essentially creates a vertical monopoly and eliminates competition, therefore restricting consumer access to independent servicing.

The legislative decision to move forward with this bill had left Tesla enraged. Tesla argued that the administration had passed the amendment that did not allow for a fair process in state legislation, claiming they had ‘changed their minds’ despite prior agreements. The firm strongly believed this decision was a direct attack in correlation their innovative practices.

Revise and restrict

Not long after the new rule regarding Tesla’s direct-sales model in New Jersey, the administration had revised their decision. Nearly one year later, Tesla received permission to sell in the state of New Jersey under restraining conditions.

The governmental restraints had only allowed Tesla to own and operate up to four dealerships within the state. Christie explains his reasoning behind this reversal was due to external legislative pressures that influenced the Anti-Tesla policies the year prior. However, he views that Tesla was asking for an exception to the law, which contributed to the limited amendment clause within revision.

Changing the franchising approach

In addition to introducing the world to the new technology for the future of the auto industry, Tesla leaves many questioning if this is the type of change that will lead the shift in automotive franchising.

Their unique efforts have created a significant impact on exactly how we adapt modernization in the approach of the idealistic business model in the franchising industry.

The company strives to disprove assumptions of the impossible about creating something anti-typical. Traditional automotive franchising models support the idea of mass production by the manufacturer and to then market through multiple distribution channels. Instead, Musk took this model and built his early foundations of the company with a vision set out to do nearly the exact opposite.

The branding behind Tesla is something that has gained great traction in such a short amount of time. Elon Musk leads his company fueled by being different than everyone else, despite government input. The young automaker has made decisions that are bold and unheard of, choices that might be able to lead the way to an entirely new industry shift. Musk just might be responsible for introducing the future we can’t even wrap our minds around.